A Little Central Planning For Wall Street

Posted by Tom Lindmark on March 12th, 2009

Today’s “sleep with dogs and you get fleas” lesson is courtesy of Barney Frank and Andrew Cuomo.

These two charming gentlemen are going full steam ahead on devising a plan for Wall Street compensation. In other words they’re putting together legislation to dictate how much money and in what form a private company may pay its employees.

While this may be vaguely legal in a situation in which the government is assisting a distressed company, it would seem to be significantly over the line as a general rule. Whether the banks have the chutzpah to push back we will have to wait and see.

The Wall Street Journal article reporting this turn of events had one of the most disingenuous quotes that I have heard in some time.

A person close to Mr. Cuomo said change is needed but the intent isn’t to micromanage or interfere with the private sector.

“We certainly need to understand the industry’s perspective on the potential unintended consequences of compensation reform before we finalize these long overdue changes,” the person said.

I have little sympathy for the Wall Street group at this point in time but even they don’t deserve this sort of central planning.